According to census data, Native American reservations did not benefit equally from the economic boom of the 1990s.

Was poverty reduction solely an urban phenomenon
in the 1990s? Examining the poverty analysis literature might lead
you to this conclusion, especially since scholars who examine the
issue often focus on changes that occurred in metropolitan neighborhoods.
However, changes in the incidence of poverty varied in other geographic
areas. One way to examine trends in nonurban poverty is to look
at the changes that took place over the decade in a rural part of
the Ninth Federal Reserve District that is known for high poverty
rates: Native American reservations.

This article examines several social and economic trends that have
taken place on District reservations since 1990, with a focus on
the change in poverty rates and incomes over the decade. At first
glance, the significant changes that occurred during the decade
suggest that reservations were generally better off in 2000 than
they were 10 years earlier. While many of the changes were momentous,
areas for concern remain—especially for the reservations' Native
American populations.

Population trends

Broadly speaking, reservations are state- or federally recognized,
geographically defined areas of varying size over which Native Americans
have the primary governing authority. The Ninth Federal Reserve
District, which encompasses Minnesota, Montana, the Dakotas, Upper
Michigan and northwestern Wisconsin, has 45 reservations. Minnesota
has the most, with 14, while Montana's 7 reservations have the highest
total population, with 63,565 people in 2000 (see Table
1).

Overall, District reservation populations grew at a rate of 17.8
percent between 1990 and 2000. This rate was 4 percentage points
higher than the rate for the rest of the nation (13.2 percent) and
5 points higher than the rate for Minnesota—the fastest growing
of the District's six states. Many large Ninth District reservations
posted moderate population gains, while smaller reservations (those
with fewer than 1,000 residents) tended to grow at a much faster
rate.

Population data categorized by race reveal that reservations are
not just populated by Native Americans. 1/ While
numbers vary across reservations, Native Americans accounted for
approximately 60 percent of District reservation populations in
1990 and 2000. Whites were the second-largest racial group on reservations,
accounting for 41 percent of the population in 1990 and 34 percent
in 2000. Over the intervening decade, however, the growth in the
Native American population accounted for 72 percent of the approximately
30,000 people added to the total District reservation population.
Whether this increase was due to natural population growth or Native
Americans returning to reservations remains unclear.

Income and poverty

Overall, the decade saw an economywide boom that was generally
accompanied by improved income and poverty trends for most reservations.
However, Ninth District reservations did not benefit equally from
the boom and most still lagged significantly behind their respective
states on several important income and poverty indicators.

Incomes increase.For most reservations, median household
income increased at a much higher rate than it did in their respective
states. After adjusting for the change in price levels over the
decade, the increase in household income on northern Wisconsin's
Bad River Reservation was almost three and a half times that of
the state of Wisconsin (57 percent and 16.8 percent, respectively).
Some of the substantial increases in median household income may
be partially attributed to revenue from reservations' casino operations.
2/

For example, the Flandreau Reservation near Sioux Falls, South
Dakota, had a high level of casino revenue and an adjusted increase
in median household income of close to 40 percent over the decade.
Still, for almost one out of every five reservations in the Ninth
District, the rate of increase in median household income was lower
than the rate of increase of the state median, and in 90 percent
of District reservations, median household incomes remained below
their respective states' figures.

Poverty drops.Did the economic boom on District reservations
lift residents out of poverty during the 1990s? Census data reveal
that poverty rates decreased between 1990 and 2000 for almost every
reservation (see Table 1). Overall,
the poverty rate for the District's reservations dropped by 7.5
percent over the decade, with Wisconsin reservations, on average,
showing the largest decline in poverty: a 22.5 percentage-point
decrease. South Dakota reservations, on average, had the lowest
decrease: 4.2 percentage points. The number of high-poverty reservations
(those with a poverty rate above 40 percent) also declined, from
23 in 1990 to 9 in 2000.

More modest declines in the poverty rate were the rule for District
reservations, especially for those with the largest populations.
For example, the rate of poverty of the largest reservation in the
District, the Flathead Reservation in Montana, decreased by 2.6
percentage points between 1990 and 2000. Two notable exceptions
to this trend of decreasing rates included the Fort Peck (Montana)
and Crow Creek (South Dakota) reservations, where the poverty rate
increased by 3.8 and 6.9 percentage points, respectively. Even with
dramatic proportional declines over the decade, District reservations
had poverty rates in 1990 and 2000 that were considerably higher
than the rates in their respective states (see the graph below).

For the Native American population on Ninth District reservations
(61.3 percent of the total reservation population in 2000), poverty
rates decreased by 12.2 percentage points over the decade. Poverty
proved to be more widespread for Native Americans on reservations
(see Table 2). For example, 42 percent
of District Native Americans living on reservations were in poverty
in 2000, compared to 32 percent of all reservation residents. Even
though Native Americans were 60 percent of the total reservation
population, they made up a larger share of the population in poverty
for both decades (80 percent), further suggesting that poverty persists
for this group even as household incomes increase.

A mixed portrait

In summary, despite the fact that a number of positive trends occurred
during the 1990s, census data reveal a mixed economic portrait of
Ninth District reservations. Reservation incomes increased and poverty
declined. However, a sizable gap still exists between reservations
and their respective states on these baseline poverty and income
measures. The data also show that reservations did not benefit equally
from the economic boom of the 1990s. Many small reservations with
vibrant casinos located near large urban areas, such as Wisconsin's
St. Croix or Forest County Potawatomi reservations, did very well.
On larger reservations in the rural west of the District, such as
Montana's Fort Peck Reservation, most indicators declined slightly
or remained unchanged.

1/ When considering census data
on race, it is important to note that Census 2000 significantly
revised the questions used to identify race and ethnicity. In particular,
questions related to Hispanic ethnicity were separated from race-related
questions, and respondents could select more than one race category
to describe themselves. Nationally, 98 percent of respondents chose
only one category. For more on the changes to race and ethnicity
in the 2000 census, see Elizabeth Grieco and Rachel Cassidy, Overview
of Race and Hispanic Origin, Census 2000 Brief, U.S. Census
Bureau, March 2001.

2/ For an analysis of Ninth District casinos,
see Douglas Clement, “Not a great bet,” fedgazette,
Federal Reserve Bank of Minneapolis, March 2003.